Do you manage a small business and are overwhelmed with dealing with taxes and invoices while trying to keep your business afloat? By following these tips, you can simplify accounting for your small business.
You should first break down the accounting into smaller pieces and set easily attainable goals for yourself. Know that accounting is a time consuming process so splitting it into parts will make is more manageable. This will also help with your stress and anxiety about accounting since you will see the completion of your smaller goals.
-Calculate minimum and ideal monthly profits
Keep track of all invoices and calculate revenue each month to make sure you can successfully keep your business running. Calculating a number for the invoices will allow you to have an exact number you need to earn each month. Also having a minimum revenue goal will ensure that you are at least breaking even between your expenses and profit.
-Personal vs. Business
Keep your personal and business accounting separate. Even though it is all coming in and out of your pocket, you want to keep it separate. Don’t use your business credit card for personal expenses. Mixing the two finances will create a false image of your true financial state.
-Keep all records
All receipts, invoices, bank statements need to be kept in an organized fashion (organize by alphabet or date). You may think that you will remember a number for a certain expense, but it will be complete chaos if you forget. Having a written track record of everything coming or going from your business will assure your financial state.
-Schedule time for accounting
In the mix of running your business and marketing and trying to have a personal life you need to set aside time for accounting. Even if it is for 30 minutes, you have to schedule it in your week somewhere so you actually have time to work on it. Keep yourself informed on your businesses finances weekly so you know exactly where your business stands. This will also lower your stress levels so you are not left guessing how your business is doing financially.
-Hire an accountant if you can
DIY accounting can be difficult when you are managing every other aspect of your business as well. Weigh the benefits of hiring an accountant to do it for you. If you can afford to hire someone to do your accounting for you, hire someone! If you are still a growing business consider computer software programs that can help you gain insight into your businesses finances.
People want to see your business succeed and accounting will make sure your business continues to exist and expand. Follow these tips and it will lower your stress about accounting.
CPA Corporation is here for you to help you with taxes and business advisory. Give us a call today and see if hiring a bookkeeper for your business could be beneficial for you.